Diversification

• Are your funds making HUGE gambles with your money that haven't YET appeared in the risk data? Wouldn't you like to know?
• Are they behaving (or will they behave?) like the asset class you are using them for in your strategic portfolio allocation?
• Has the fund changed its style so the long term data you used to select the fund is meaningless?

The first step in our grading methodology is to measure how closely a fund behaves like any one of over thirty different asset classes covering domestic blend, value, growth, and large, mid, small and micro cap, foreign developed, world and emerging markets, taxable government, corporate, high yield and tax exempt fixed income of varying maturities, balanced (a blend of stocks and bonds) and finally, real estate as well. With over thirty asset classes to choose from, and the ability to grade a fund on ANY of these asset classes, you can easily see how any fund fares with respect to how you might be using it within your strategic allocation.

LESS THAN 1 in 5 FUNDS MAKE THE HONOR ROLL FOR DIVERSIFICATION!

If the fund has a correlation coefficient (the statistic we use to measure diversification) of less than .82 (or an R-squared of less than .67) relative to ALL of the asset classes, the fund is automatically graded an F for diversification BECAUSE IT DOES NOT BEHAVE LIKE ANY ASSET CLASS. Such a fund is VERY uncertain and VERY unpredictable. If the data for a fund is insufficient, or, it behaves this erratically, we do not attempt to grade it on any of the other criteria because it should not be used for fulfilling any particular asset class within your strategic allocation.

Find out if YOU are not as diversified as you thought by using the search system for your funds above, or click here to do an advanced search.